How medical practices are faring in 2020

A majority of physicians have seen their practice’s financial state improve or stay the same in 2019, according to the results of the 91st Annual Medical Economics® Physician Report.

In all, 23% of respondents say their practice did better financially in 2019 compared with a year prior. A further 55% say their practice is doing about the same as the year before. These figures saw a modest rise from 2018. Only 22% of respondents say their practice is doing worse than the prior year. The respondents chalk their improved performance to seeing more patients (52%), pay-for-performance incentives (29%) and changes in their practice models (26%).

Those who say their practices are worse off than a year ago cite as reasons more time spent on uncompensated tasks (67%), lower reimbursements from commercial payers (66%) and higher overhead (60%).

Compared with five years ago, 34% of respondents say they are doing better financially, and 38% say they are doing about the same.
This year’s survey garnered 1,055 responses across 17 specialties. A majority of respondents (29%) practice family medicine, with internal medicine (20%) coming in a close second.

The survey was conducted by HRA®(Healthcare Research & Analytics) via email in February 2020, before the COVID-19 pandemic began to affect the financial state of practices. Below are other highlights from this year’s report.

Salary

The estimated 2019 total income for the typical physician respondent was $273,000. For those with an ownership stake in the practice, that number jumped to $289,000, while those without an ownership stake averaged about $258,000.

Within these figures, the gender pay gap is still prevalent, with male physicians making an average of $300,000 and female physicians earning an average of $226,000. Although these sums are about $6,000 lower than in 2018, the disparity remains the same at $74,000.

Incomes also vary depending on specialty. The top specialty is cardiology, with an average income of $381,000, followed by urology, with an average income of $358,000. Internal medicine physicians bring in an average of $243,000, and family medicine practitioners earn $241,000 on average.

Physicians’ pay also seems to be tied to geographic region. Physicians in the Midwest are the only ones who saw an increase in income ($2,000) between 2018 and 2019, while the Northeastern, Southern and Western parts of the country saw decreases in income.

Of the respondents, 63% say they see a minimum of 51 patients in their office in a typical workweek, while 18% see a minimum of 26 patients in the hospital.

Respondents also cite as a challenge the average medical school debt of $161,000, and 35% cite the need for the United States to adopt a public option to supplement the Affordable Care Act.

The state of the medical profession seems strong, with 55% of respondents saying that if they could go back in time, they would choose the same medical specialty and 25% saying they would go into a different specialty. Only 15% say they would choose a different profession altogether. Additionally, 42% of responding physicians say they would recommend the medical field to their children or a friend’s child, while 32% say they would advise against that career choice.

Malpractice rates

For malpractice insurance, the 2019 average cost was $17,900, while 31% of respondents say they don’t know what their premiums are.

Regarding changes, 59% say their premiums stayed the same from 2018 to 2019. A further 23% say it increased, while only 5% saw a decrease in premiums. Thirteen percent of respondents say they don’t know whether there was a difference in premiums between the two years.

The median annual malpractice premium for respondents who describe themselves as practicing family medicine is $8,100; for internal medicine, $8,500; and for cardiology, $18,000. Male physicians saw a higher median annual malpractice premium, at $10,300, than female physicians, who saw a median premium of $9,300.

To help boost their business, a vast majority (82%) of physician respondents say their practice offers a minimum of one ancillary service. The top ancillary services provided by physician practices are electrocardiogram (52%), lab services (48%), spirometry (28%), radiology or imaging services (25%) and nutritional or weight loss counseling (24%).

About half of the respondents estimate that between 1% and 10% of their 2019 revenue was generated by these ancillary services.
Prior authorizations

For prior authorizations, a perennial annoyance, physicians spend an average of 11 hours a week, while office staff spend 14 hours a week on average on them. Thirty-five percent of respondents cite this time spent as the biggest frustration with prior authorizations. Coming in a close second (34%) is the feeling that insurers were telling physicians how to do their jobs.

The majority of respondent practices (63%) currently have no IT staff, but that is likely to change in the near future as practices and the Centers for Medicare & Medicaid Services are forced to move toward telehealth solutions because of the ongoing COVID-19 pandemic.